US-based artificial intelligence (AI) startup Anthropic is raising a $2bn investment from technology giant Google, reported Bloomberg.

A representative for Anthropic said that Google has made a $500m upfront investment in the startup.

Over time, Google will invest the remaining $1.5bn.

The investment is structured as a convertible note, which is a form of debt that will turn into stock at the startup’s subsequent funding round.

Google is already an investor in Anthropic, which has created a chatbot, dubbed Claude, a rival to OpenAI’s ChatGPT.

With Claude, users can submit requests or prompts to get relevant results.

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The additional investment underscores Google’s efforts to better compete with rivals such as Microsoft, which has invested billions in OpenAI.

Google and Anthropic are also involved in significant cloud deal.

According to the source, the cloud agreement, which will allow Anthropic to use Google’s array of computer capabilities, was even bigger than the most recent investment and would span over several years.

Late last month, Amazon announced plans to invest $4bn in Anthropic.

According to the agreement, which was also structured as a convertible note, Anthropic will train its language models using AI chips and Amazon’s cloud computing.

Additionally, Amazon staff members and cloud clients will gain access to Anthropic’s technology.

Founded in 2021 by siblings Daniela and Dario Amodei, who were once employed by OpenAI, Anthropic raised $450m in a Series C funding round in May.

Rather than taking on convertible debt, Anthropic’s next move might be to seek conventional investment, the report said.

At that time, the startup will be revalued and the shares of Google and Amazon will convert to equity.

The sources said that the company has plenty of cash on hand and is unlikely to rush to raise further funds given its recent investments from Google and Amazon.